U.S. Stocks Slump, Led By Financial, Technology Shares
NEW YORK (MarketWatch) -- U.S. stocks on Friday fell for a second day, with financial and technology stocks fronting the decline as negative news hit both sectors.
"We had to follow the negative news; it's the perfect storm of bad news for financials," said Art Hogan, chief market strategist at Jefferies & Co.
After posting gains at the start, the Dow Jones Industrial Average fell 93.3 points, or 0.8%, to 12,191, with 26 of its 30 components trading lower.
The reason behind all of this volatility is because the market is unsure of the longer-term direction of the U.S. economy," said Robert Pavlik, chief investment officer of Oaktree Asset Management.
The blue-chip declines were led by Intel Corp. , down 3.4% and Citigroup Inc. , down 2.8%.
The S&P 500 fell 10.88 points, or 0.8%, to 1,331.65, while the technology-laden Nasdaq Composite declined 28.68 points, or 1.3%, to 2,271.1.
Helping pave the way down for tech stocks was Intuit Inc. , recently off 11.9%, after the software company reported a drop in quarterly profit Thursday. .
Financial follies
The fall for financials was helped along by Fannie Mae and Freddie Mac , both of which turned sharply lower, with Fannie Mac down 8.3% and Freddie Mac off 5.8%, after downgrades from neutral to sell by Merrill Lynch analysts. .
Early trading volume on the New York Stock Exchange topped 728 million, and declining stocks outran advancing issues more than 2 to 1, while more than 557 million shares exchanged hands on the Nasdaq, and decliners topped advancers nearly 3 to 1.
On Thursday, the major U.S. stock indexes fell more than 1% after data highlighting the slowing economy sank early optimism on the technology sector.
"I think the driver is going to be -- and has been for awhile -- the kind of yin and yang between inflation and recession," said Paul Nolte, director of investments at Hinsdale Associates. .
"There's a tug of war between folks that believe that we're at or near a bottom, and want to start to look through the first half to the second half, and price in earnings. Then there's a second group that doesn't believe in the 'E' in P-and-E levels, and believes every rally should be sold," said Hogan.
A slide in crude-oil prices helped in tilting energy stocks lower, with the Amex Oil Index down 0.4%, and the Amex Natural Gas Index also off 0.4%.
Heavy metal
In commodities trade on the New York Mercantile Exchange, crude oil prices shifted course, with April-dated light crude recently rising 53 cents to $98.76 a barrel. .
Elsewhere on the Nymex, gold futures fell and platinum futures declined after setting the latest in a string of record highs. .
In the forex market, pressure continued against the greenback, with the dollar index at 75.54, down from 75.615 in late U.S. trading on Thursday. .
Overseas, European equities looked set to end with gains, as higher food and bank stocks offset weakness from auto makers and from Germany's second-largest utility, RWE. .
In Asia, most markets retreated, with Japanese stocks pushed down by exporters including Honda Motor Co. and Canon Inc. .
By Kate Gibson